CBDT detects ₹2.2k-cr ‘fictitious transactions’

NEW DELHI: The Central Board of Direct Taxes (CBDT) on Saturday said it detected “fictitious transactions” of ₹2,200 crore after the income tax department carried out multi-city raids on a prominent business group.

While the CBDT statement did not name the group, people aware of the matter identified it as the Dainik Bhaskar Group, which is involved in various business sectors such as media, power, textiles and real estate with a group turnover of more than ₹6,000 crore per annum.

They said the income tax department continued its searches at the premises of the group for the third day, with the taxmen allegedly finding multiple irregularities in the operation of group companies like diversion of funds, and cyclical transactions within group companies. There was no statement from Dainik Bhaskar Group on Saturday’s developments. On Thursday, it posted a message on its website saying the government was scared of true journalism. The raids, which began on Thursday, continued at 32 locations – 20 residential and 12 office premises belonging to key employees and promoters of the group. The statement said fictitious transactions worth ₹2,200 crore; circular transactions worth close to ₹700 crore in the form of booking bogus expenses and siphoning profits from listed companies as well as diversion worth ₹408 crore out of a loan taken for a mall run by the group were detected. “The voluminous material found during the search operations is being examined,” CBDT said in the statement.

“Cyclical trading and transfer of funds among group companies engaged in unrelated businesses to the tune of ₹2,200 crore has been found. The enquiries have confirmed that these have been fictitious transactions without any actual movement or delivery of goods. The tax effect and violation of other laws are being examined,” the statement said.

Opposition leaders including Rahul Gandhi, Digvijaya Singh, Arvind Kejriwal, Ashok Gehlot and others have said the government is targeting the media house for covering the Covid-19 mismanagement by the Centre.

The CBDT statement said the group has more than 100 companies including the holding and subsidiary companies and that they have been operating several companies in the names of their employees that have been used for booking bogus expenses and routing of funds.

“During the search, several of the employees, whose names were used as shareholders and directors, have admitted that they were not aware of such companies and had given their Aadhaar card and digital signature to the employer in good faith. Some were found to be relatives, who had willingly and knowingly signed the papers but had no knowledge or control of the business activities of the companies, in which they were supposed to be directors and shareholders,” CBDT said.